Revenue sharing

Revenue Sharing

1. The practice of splitting a company's profits and losses between parties. For example, a partnership shares revenue between partners in accordance with each one's share in the company. Alternatively, revenue sharing may indicate any arrangement where a company gives a portion of its profits to its employees or other companies in an alliance.

2. The practice of a government giving a portion of tax revenue to subdivisions of government. For example, a province may apportion a certain percentage of the taxes it collects to municipalities and a national government may do the same for its provinces. In the United States, the federal government practiced revenue sharing with the states until the 1980s, when the Reagan administration stopped the practice to reduce the national deficit.

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